I need Advice please!!!!

I need Advice please!!!!

I have a question I have recently looked at a 4br 2 1/2 bath house 2800 sqft. The house looks in very good shape the seller is very motivated and ready to go.
i'm jus having trouble coming up with a offer. Should I get the house inspected by a home inspector first and should i get it appraised before i make an offer first.

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Comps

What are the comps showing its worth? Whats the asking price for the house? How much in repairs are needed? Do you have a buyer lined up? Or are you holding it for a rental? The inspection comes after the deal is agreed upon, then you possibly have an out if need be. Good luck!

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SEMPER FI
GET SOME!


The owner is selling the

The owner is selling the house for 188,000 there are 3 houses in the neighborhood going for around 215,00 the difference in the other house isnt much the owner just
wants to get rid of the house. The repairs are about 5K .I have a buyers list lined up and ready just im wondering what would be a good offer to make.


Well....

I'm pretty new so don't just take it from me.... Listen to the more experienced DG family members. But even if the homes in the area are listed @ $215,000 (and just because they are listed @ those prices doesn't mean a thing. Check out the homes in the area that already sold) it doesn't mean that those are the correct comps. Say for instance the comps are $215,000, well $188,000 is only about 12-13% below market value. Plus you got to minus the $5,000 of work that needs to be done. If you want to assign the contract, you probably want to get it for at least 30% below market minimum, plus minus the 5,000k. If I were you I wouldn't offer anything more than $145,000-$150,000....If you are trying to assign the deal. Your buyers want a great deal, and you want to get some cash for yourself, so I would really think this through and take all the advice you can get before any offers are made.


Compare Values (comps)

Compare Values (comps) cannot be based upon what other houses are listed for in the neighborhood, as those houses have not sold. Comps are based upon houses that have already sold in the last 3-6 months, and a real estate agent can help you with comps. If the other houses currently listed in the neighborhood aren't selling as they are priced to high, they sure aren't comparable. Also, they may be in better or worse condition.

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Rick Allison, Realtor
Amarillo, Texas USA

Find comps, private lenders and cash buyers nationwide: www.TheRealEstate.PRO

Foreclosure and pre-foreclosure search engine: http://tinyurl.com/b6w7h6o

The People Helping People Movement: www.greatEPXsite.NET


re

RickInAmarillo wrote:
Compare Values (comps) cannot be based upon what other houses are listed for in the neighborhood, as those houses have not sold. Comps are based upon houses that have already sold in the last 3-6 months, and a real estate agent can help you with comps. If the other houses currently listed in the neighborhood aren't selling as they are priced to high, they sure aren't comparable. Also, they may be in better or worse condition.

Oh, and what you offer is based on a variety of things, too, including how long the property has been on the market and how much money you want to make. You want to offer less that what comps have sold for, because you want to make a profit, and you want yours to sell quicker than the ones that have sold and will sell in the future. In other words, you want to figure out what your soft price is (what you would resell for quickly), and then offer less than that (the difference, minus expenses, would be your profit). If your offer is rejected as being too low, you can always consider their counter offer or you can make a counter offer of your own. Start low!

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Rick Allison, Realtor
Amarillo, Texas USA

Find comps, private lenders and cash buyers nationwide: www.TheRealEstate.PRO

Foreclosure and pre-foreclosure search engine: http://tinyurl.com/b6w7h6o

The People Helping People Movement: www.greatEPXsite.NET


Your buyers list should tell

Your buyers list should tell you what your offer price range should be.
If the majority of your buyer want $30k equity after repairs figure that into your cost. If a different buyer requires a percentage of FMV, figure that into your cost.

Your offer = buyer's price (plus repairs) + what you want to make.

If you or your buyer don't require a large spread of equity vs fair market value, you have room to offer more. If you're okay with making $5k vs $10k you can offer a little more.

Just make sure that you leave yourself some wiggle room. If you can make a little more, great. If you can sweeten the deal for the end buyer, great.

You can always offer a little more during the negotiating if needed as long as it could be a deal still for you and your buyer.

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Thanks.


Gangremond

You forgot something very important in your formula. The buyers selling expenses!! If you just figure $30,000 plus repairs plus your fee the commissions, closing costs, insurance, utilities, cost over runs Etc. come out of your buyers $30,000 so you are not figuring his profit requirements accurately. You will have a deal your buyer does not want. This is why so many new investors get what they think is a good deal based on a formula like yours and no one buys it.
Here is a simple example based on a house with $100,000 ARV and $10,000 repairs
$100,000 House
-$10,000 Repairs
-$30,000 Buyers equity
-$ 5,000 your fee
Your offer $55,000
YOU PAID TOO MUCH!!
Your buyer sells property for $100,000 in three months after rehab.
He will have commissions, closing costs, insurance, utilities cost over runs
Average 12%. That is $12,000 in costs IF he is a cash buyer and does not have to pay HML or PM costs!
I see this mistake made ALL the time. Hope every one catches on here!
So your buyers profit would be $18,000 NOT $30,000!! Or your profit if you do the flip yourself!!
Remember these percentages are an example, they can and will vary on each deal. However you must include them. Can you see it now??

Michael Mangham
MD Home Acquisitions LLC

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Knowledge is power, but execution trumps knowledge. Tony Robbins

http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site


I Need Advice Please

I need a line on the banks that still allow immediate equity loans.


I talk to a real estate

I talk to a real estate agent she said the market value on the house was between 178,000 and 180,000 I understand the comps now I looked at all the houses that were sold in the past 6 months and the average was going for about
152K to 165K. I can see what everyone is talking about thanks.


Nearly all the above advice is good, but?

Poin2122 wrote:
I talk to a real estate agent she said the market value on the house was between 178,000 and 180,000 I understand the comps now I looked at all the houses that were sold in the past 6 months and the average was going for about
152K to 165K. I can see what everyone is talking about thanks.

When I structure an offer I try to always present an offer with 3 options for the seller to choose from. If you just go in and offer let's say 100k, you might lose the deal right there because you offended the seller. When you give multiple options that all benefit you the seller is likely to weigh out his options to see which works best for him, not just a take it or leave it kinda deal.

Example
option 1: 95k cash

option 2: 125k, seller carries 30% of the loan with the other 70% being fianced.

option 3: 150k 100% seller financing

option 4: seller agrees to lease the property to you until rehab is complete then the profit will be split 50/50.

Be openminded when it comes to this game, the more creative you can be the more money you'll make.


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